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Dodd-Frank requires the SEC to issue rules barring national exchanges
from listing any company that has not implemented a clawback policy that does
not include recoupment of incentive-based compensation for current and former
executives for a three-year period. Unlike the Sarbanes-Oxley clawback rule, Dodd-Frank requires companies to recover compensation,
including options, based on materially inaccurate financial information,
regardless of misconduct or fault.

Although the SEC has not yet issued rules on this provision,
a number of companies have already disclosed their clawback policies, likely
because proxy advisory firms Glass Lewis and Institutional Shareholder Services
have taken clawback policies into consideration when making Say on Pay voting
recommendations. Equilar has reviewed the proxy statements for Fortune 100
companies filed in calendar year 2013 for compensation events for fiscal year
2012. The organization released a report
summarizing its findings, which are instructive.

Of the 94 publicly-traded companies analyzed by Equilar, 89.4%
publicly disclosed their policies; 71.8% included provisions that contained
both financial restatement and ethical misconduct triggers; 29.1% included
non-compete violations as triggers and 27.2% had other forms of triggers. 68% of the policies applied to key executives
and employees including named executive officers, while only 14.6% applied to
all employees. 7.8% of clawback policies applied only to CEOs and/or CFOs. 35.9% of policies covered a range of
compensation types including deferred compensation, sales commissions, flexible
perquisite accounts and/or supplemental retirement plans.

The Equilar report provides language and links to the
filings for Wal-Mart, Ignite Restaurant Group, CVS Caremark, Johnson &
Johnson, AIG, Supervalu, Apple, IBM, Johnson Controls and ConocoPhilips. The report also notes that despite the early
disclosures, they tend to fall short of the Dodd-Frank standard in that only
37.9% mention outstanding options. This
will surely change once the SEC finalizes the rule.